The research aimed to analyze the stability of Islamic banking industry and its determinants in Indonesia. The same analysis was also done to the conventional banking industry as Indonesia practices ...dual banking systems. Using monthly data on Indonesian Banking Statistics for 2008-2013, this research implemented the Banking Stability Index (BSI) model for predicting the bank's stability. The analysis began with measuring BSI then using VECM to examine the effect of variables on BSI. The result showed that the BSI of both banking system was exhibiting the moderate level of stability though Islamic banking is more stable and safe way of financing than conventional banking. The shocks of inflation, exchange rate, efficiency, income diversity, liquidity, and Industrial Production Index responded positively by Islamic Bank' stability, while interest rate and market share responded negatively. In another hand, conventional bank' stability responded positively the shock of the exchange rate, income diversity, interest rate, liquidity, and market share, while other variables responded negatively. The results of shocking variables strongly indicated that the conventional banking is more vulnerable than Islamic banking. Islamic banking looked tend to the shock resistance and less volatile. This conclusion, however, might be still questioned as the BSI was not designed specifically for Islamic banking. Therefore, constructing an Islamic BSI (under Islamic banking characters) was important to measure the banking stability more appropriate and to develop a proper early warning system for Islamic banking industry.
The relationship between interlocking directorates and corporate finance patterns is a widely-researched aspect of the literature on national financial systems. This literature often considers the ...United Kingdom to be analogous to the United States, without directly investigating the nature and impact of finance-industry relationships. Based on a hand-collected data set covering eight benchmark years between 1950 and 2010, the authors start filling this gap by combining historical narratives, social network analysis, and regression analysis. They investigate whether finance-industry relations affect corporate borrowing patterns differently across time periods. The authors find that network-embedding had an impact on corporate borrowing from the 1950s to 1970s, but not thereafter. They also find that network structure and its function do not always evolve in parallel, highlighting limitations of purely structural approaches to understanding the link between corporate networks and firm behaviour and the importance of the historical idiosyncrasies of each country case.
This research attempted to evaluate Business Intelligence criteria accelerating further development of Core Banking System with creating meaningful analysis, decision support environment and ...optimizing the investments. By reviewing the related literature, Business Intelligence criteria were determined and the importance and priority of each criterion specified on the basis of questionnaire and doing Friedman and Binomial tests. This research presented an evaluation model based on the fuzzy multi-criteria decision making (Fuzzy TOPSIS) method. In the fuzzy-based method, weight of each criterion and results of assignable intelligence were described using linguistic terms, which can also be expressed as triangular fuzzy numbers. According to the findings, Risk Management System ranked as the first module with the largest distance from the negative ideal which indicated that this system had appropriate Business Intelligence capabilities to fortify decision support environment.
Purpose
This paper aims to analyse the implications of globalisation and the adoption of international standards (International Financial Reporting Standards IFRS) for accounting information quality.
...Design/methodology/approach
This paper uses a sample of 329 banks across 29 countries leading up to and beyond the implementation of IFRS to test for related hypotheses.
Findings
First, banks’ financial statements are prepared on the basis of international standards as national economies are integrated when social norms are diffused. Building on these results, the second test suggests that the relatively high-quality earnings among banks in Africa during the period is attributable to the adoption of and interaction of IFRS with globalisation and the strategy of banks to diversify within and across interest and non-interest income.
Originality/value
The authors investigate how globalisation and the adoption of IFRS affect accounting information quality.
Purpose
The purpose of this paper is to check if there is a procyclical lending behaviour in dual banking systems of the Golf Cooperation Council (GCC) countries. The study also tries to control for ...the role of Islamic banks in amplifying or mitigating the procyclicality of dual banking systems.
Design/methodology/approach
Estimation of a dynamic panel model using annual observations on a sample of 81 banks based in the GCC countries between 2005 and 2018. The study uses two business cycle indicators as dependent variables, namely, output gap and oil price gap.
Findings
The system generalilzed method of moments (GMM) estimator and robustness checks confirm the procyclical lending pattern of dual banking systems in the GCC. Estimation outputs also indicate that this procyclicality is more pronounced during economic slowdowns. However, it is found that Islamic banks’ lending is less procyclical, giving support for the stability view of Islamic banking systems. The authors think that the implementation and conduct of macroprudential policies are very challenging for banking authorities when Islamic banks and conventional banks operate under the same regulatory framework.
Research limitations/implications
The research paper may suffer from some limitations. Indeed, exploring panel data instead of country-case data may lead to a problem of heterogeneity that may underpin the credibility of the econometrical estimations. To deal with this problem by introducing a set of bank-specific and time-specific dummies. Furthermore, small N samples (N = number of individuals) may affect the reliability of the tests for the validity of instruments and autocorrelation used under the GMM estimator, leading to inefficient results. Consequently, the number of selected banks is extended as much as possible (81 banks), becoming important comparing to the time dimension of the panel.
Practical implications
Policymakers and regulators are incited to embed the perspectives of Islamic finance regarding lending cyclicality in dual banking systems, which promote the efficiency of resource allocation to the financing of assets and by consequence enabling financial stability. The stability view of the Islamic banking system could prompt policymakers and regulators to encourage the implementation and development of Islamic banks.
Originality/value
The present paper tries to overcome the lack of empirical studies on the procyclicality of dual banking. The study contributes to this novel literature in two ways. First, it focuses exclusively on GCC banking systems. In fact, compared to other emerging markets, business cycles characterizing GCC are specific because of the role played by the oil and gas revenues in the economic growth and financial system is crucial. Second, this paper brings into evidence the procyclicality of GCC banking systems also when the oil price is taken as a business cycle indicator.
The integration of different states in a already existing union or in a new one represents a long-lasting process involving harmonisations on various fields – political, economic, legislative, ...social, cultural, technological, informational, etc. Besides the integration of the states and of the different authorities in a common mechanist, the business organizations also have to comply with certain standards and to align to certain procedures. The banking system is not an exception being probably one of the pillars of the economic and financial integration of a state in a union. Banking integration may be considered the process leading to a convergence towards a single market for all products, processes, procedures, standards, transactions from the banking field. All sets of standards, mechanisms and procedures should be observed both by banks, regulation and control bodies, but also by customers. Only in this way one can create the premises for the most favourable banking transactions. The integration of the banking system in a union is determined, conditioned and influenced by a series of factors. Based on the data published by the Bank for International Settlements, the authors carry out a close and pertinent empirical analysis of the banking assets flows between the Eurozone countries in the period 2000-2014. The paper also deals with the commitments that the recent economic-financial crisis created on the banking assets flows. The authors resort to regression equations in order to demonstrate the connection between the effects of banking integration and various factors involved (the relative dimension of the country, the significance of the banks in the financial system, the Herfindhal index, the degree of concentration or dispersion of the property on banks, the degree of independence, the tradition of law). In order to measure the level of banking integration of the national bank systems, the indices we used are the degree of openness towards the exterior, the degree of internationalization of the national bank systems in the Eurozone. The results of this research point out a whole series of commitments from a scientific point of view, but also regarding a good practices model which should enhance the synergic integration of the different national banking systems. A part of the outlined conclusions may be oriented towards specific directions and levers in order to modify the national strategyfor the adaptation of a candidate state to the Aquis communautaire.
This paper links banking system development to the colonial and legal history of African countries. Based on a sample of 40 African countries from 2000 to 2018, our empirical findings show a ...significant dependence of current financial institutions on the inherited legal origin and the colonization type. Findings also reveal that current financial legal institutions are not major determinants of banking system development, and that institutional development and governance quality are more important. A high share of government spending relative to GDP also positively affects banking system development in African countries.
In today competitive world, innovation is a key factor for creating competitive advantage and even for survival of the enterprises and as a propellant for business growth and prosperity and maintain ...more profitability for an organization, as a result of market needs and technology push. In service organizations, recognition of the conceptual framework of service innovation, improves performance of the Organization and creates core competencies for achieving competitive advantage through their systematic approach to service development, which is crucial for survival and maintaining competitiveness in the current financial markets. Banking systems due to the rapid global competition, the impact of structural change, deregulation effects, the use of new technologies and the increasing expectations of customers, have sought to develop and implement service innovation in their organizations. In this paper the effective factors of Service Innovation in service organizations has been introduced and case of study is Iranian Governmental Banks. Research methodology is qualitative and qualitative. Data was collected through in-depth interviews with academic experts and managers of governmental banking systems until theoretical saturation was achieved. The gathered data was analyzed using axial and open coding methods. The results show that dimensions of Service Innovation in financial service organization systems consist of six main dimensions including new service concept, new delivery system (organization), new delivery system (technological), interact with new customers, new value systems / new business partners and finally the new revenue models and 36 secondary factors. The results of this paper can be used for the understanding of service innovation for new service design and development in governmental banking system in a competitive environment at the other countries.
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